ven though debit cards have been getting a lot of headlines lately, besides cash, checks are still the most popular payment method in the United States, with billions being written every year. EZCheck, a 15-year-old payment services company, offers a wide variety of check solutions to help merchants accept more checks and realize increased cash flow, while reducing their risk from check fraud and insufficient funds.

Retail clothing stores, automobile dealerships, convenience stores, jewelry stores and many other merchants that accept checks can benefit from EZCheck's products and services.

EZCheck, a privately held company founded in 1989, got its start in credit card processing and acquiring and check services such as verification and guarantee. In 1998, the company sold its credit card division to a local bank in Houston, keeping the check services business.

The owners of EZCheck wanted to keep check services separate and not make it a part of the sale of the company because they saw an exciting and potentially exploding opportunity with the advent of electronic check conversion, said Randy Rutledge, President and CEO of EZCheck.

Rutledge and Don Singer, EZCheck's Vice President of Sales and Marketing, joined the company in 2003-both from First Data subsidiary TeleCheck Services, Inc. Rutledge, the former Chief Marketing Officer of TeleCheck, worked at TeleCheck for 17 years. Singer served as Director of Sales Training for TeleCheck and was there about seven years.

Rutledge said that at a company like EZCheck, he finds a "great sense of accomplishment and satisfaction, especially in the ability to make decisions quickly and see dramatic growth."

Today, EZCheck offers a full line of electronic check services including conversion, guarantee, verification, collection services, accounts receivable conversion and recurring payments, although check conversion makes up more than 90% of EZCheck's business-it is the most popular of all of its offerings.

In the last 12 months, the company has authorized more than $100,000,000-most of that volume being check conversion transactions.

"For some merchants, check conversion may not be the best application-for instance, where the merchant doesn't have consumer face to face at the point of sale, or where the majority of the merchant's checks are business checks that can't be converted," Rutledge said. "That's why we still offer check guarantee and check verification, but the market we're primarily pursuing is check conversion."

As the Federal Reserve Board explains, electronic check conversion is a process in which a check is used as a source of information-for the check number, an account number, and the number that identifies the financial institution. This information is used to make a one-time electronic fund transfer, or EFT, from a checking account. The check itself is not the method of payment.

When a customer pays by check at the check out, a clerk runs the check through a check reader and hands the voided check back to the customer with a receipt.

Merchants like electronic check conversion because it makes accepting checks as quick and easy as accepting credit cards; it reduces or eliminates any losses from bad or fraudulent checks; it improves their cash flow by making funds available within two banking days; and it eliminates returned check fees and reduces bank fees.

"In many ways it's the perfect version of check guarantee," Rutledge said. "If you think about it, check conversion removes the things that merchants didn't like (historically) about check guarantee.

"With check conversion, they never see a returned check, and as a result they never see returned check fees from their financial institution; they no longer have to pay any deposit fees because they are physically not depositing the paper item; they have access to the funds within 48 hours; and they don't see any returns-any returns that do come back hit our clearing account."

EZCheck has a partnership with Electronic Clearing House, Inc. (ECHO), using ECHO's clearing house services for back end ACH processing. Their partnership dates back to 1998.

"Together, we were some of the first to go out to the market (along with TeleCheck), and do electronic check conversion at the point of sale," Rutledge said about its partnership with ECHO.

EZCheck works with a network of more than 350 ISOs/MLSs across the United States, but also has four salespeople on staff, who only target large and middle market national merchants.

"Our experience has been that many of the ISOs aren't pursuing the middle market and national accounts from a check services perspective, and this is because you're looking at customized programs, customized pricing and as a result, the sales cycle can be considerably lengthy," Rutledge said.

"Our primary concerns are to be able to pursue those opportunities and to make sure that we're not in competition with our ISO partners."

On occasion, though, EZCheck will work with ISOs that are pursuing middle market opportunities by providing them with custom programs and custom pricing. EZCheck provides both buy-rate and commission programs to its sales partners, and additional incentives for specifically targeted industries. Most partners opt for a buy-rate program that allows them to keep 100% of the revenue above the buy-rate. This residual or commission is calculated and paid monthly for the lifetime of the account.

MLSs selling electronic check conversion to merchants typically can get an equipment commission because ECT requires a check reader or imager.

EZCheck resells, supports and maintains point-of-sale terminals and check readers from manufacturers such as Ingenico, Lipman, MagTek, RDM Corp., TASQ Technology and VeriFone, Inc.

"By reselling this equipment, we make our volume pricing available to our ISO partners," Rutledge said. "We buy from the manufacturers and then resell to the ISOs and allow them basically to buy at our cost."

The company provides its agents with product manuals, merchant materials, sales collateral and sales training. Singer oversees all sales training and support in order to educate EZCheck's reps on how to sell its solutions.

"I don't know of a better person in the industry who can train on how to sell check services," Rutledge said. "Singer travels several times a month and works directly with our ISO partners."

One other aspect of EZCheck's commitment to ISO/MLS partners is that it provides ongoing personalized support. The company's technical and customer service departments will assist sales reps in equipment deployment, application downloads and new merchant training to ensure successful installation. Its customer service department assists in coordinating any issues with merchants and sales reps to ensure all parties are satisfied.

"We like working with EZCheck because we always talk to a live person when we call the 1-800 number," said Scott Essary of One Source Solutions, an ISO based in Hickory, N.C. "Not only can we actually talk to a real person on the phone, we can talk to the President and VP at anytime if we are having a problem."

From the President and VP of the company to members of its sales staff to its product development operational team-everyone at EZCheck contributes expertise to supporting and developing any customized programs.

"We're very happy with the relationship that we have with EZCheck," said Chris Wilkin, Sales Director of Source One Payment Solutions, an ISO based in Los Angeles. "They are very responsive to our merchants and to our sales staff that call them with questions; they have a very 'hands' on' approach. Merchants always have different needs, and they are willing to adapt to what our customers need."

Early this spring, EZCheck will roll out its latest services offerings, which include accounts receivable check conversion (ARC) and recurring payments. They have partnered with RDM, a payment solution provider specializing in checks, for the accounts receivable solution.

"Right now, about the only people doing ARC are the credit card issuers-there are two or three firms pursuing the high market, but no one really has gone out to the middle market. We think there is a great opportunity there," Rutledge said.

"We've got a lot of knowledgeable people here that have a lot of experience; we know how to make money in the business, and we know what can be done and what can't. We will make ourselves readily available and 'shoot straight' with our partners. If we say we're going to do something, you can bet we'll do it; if you ask for something that we know we can't support long term, then we'd rather walk away from the deal than cut corners at the expense of the ISO or end use the merchant."